Marketing to Gen Z: The Ultimate Ethical Consumer

Gen Z, predicted to be the ‘most disruptive generation ever’ by the Bank of America, are shaping the ethical consumer landscape. Set to become the largest generation in the world by the end of the decade, this cohort’s income is expected to increase to $33 trillion by 2030, accounting for over a quarter of global income.

According to a report from First Insight on The State of Consumer Spending, from 2019 to 2021, the amount of Gen Z consumers willing to spend an additional 10% on more sustainable products increased by 50%. What’s more, three quarters of Gen Z consumers surveyed stated that sustainability is more important than brand name when making purchasing decisions. This trend is particularly apparent within the fashion space, as Gen Z continues to drive the growth of the second-hand and resale market. ThredUp’s 2022 Resale Report dives into the data.

62% of Gen Z and Millennials have claimed to look for an item second-hand before purchasing it new, with 21% of Gen Z stating they would pay more for clothing they know that they can resell. Sustainability is among the top three motivators cited for shopping second-hand, coming in below cost saving. However, across all industries, environmental factors still prove to be the top concern for Gen Z, above unemployment and healthcare, according to a 2021 survey from Deloitte.

Gen Z are even influencing older generations to place more importance on sustainability in their purchasing decisions. In 2021 Gen Z’s influence over their Gen X parents showed a significant increase from two years prior in preference to shop sustainable brands, and in willingness to pay more for sustainable products.

Though, brands will need to look further than their sustainability practices to truly target the ethical Gen Z consumer. Morning Consult’s 2022 report on ‘Gen Z’s Favourite Brands’ dubbed this generation harder to please by default. Across all brands tracked in Brand Intelligence in the United States, Gen Z’s average favorability rating came out at just 27%, compared with 33% for all adults and 36% for millennials. Gen Z also displayed higher unfavorability ratings across the brands surveyed. On average, 10% of Gen Z adults have an unfavourable impression of a given brand, compared with 8% for all adults and 9% for millennials.

So, how can brands best market to Gen Z?

Practice Greater Authenticity and Transparency

In terms of best practice, authenticity and transparency go without saying, however Gen Z consumers place more value on transparency than any previous generation. According to CM Group, 23% of Gen Z rank authenticity to be the most important factor when considering a brand, almost more than any other product or company attribute, including design and social impact. 22% have also stated that a lack of transparency reduces their opinion of brands and products, which is more than any other generation.

In our research into the state of brand trust in 2023, we found consumer trust to have declined significantly across all generations, though most notably among Gen Z and millennials. Gen Z shoppers do their research when making buying decisions, reportedly spending an average of 18 minutes reading reviews before making a purchase. Wendy Werve, CMO of CM Group has commented that Gen Z presents ‘a unique challenge and opportunity for marketers as they emerge from two years of hyper-focus on supply chain and pandemic-related issues.’

Harness Social the Right Way

Despite being branded as the social media generation, Gen Z shares a nuanced relationship with social platforms, aware of both the positives and negatives. Reportedly, 54% of Gen Zers surveyed by Morning Consult spend at least four hours daily on social media, with YouTube being the generation’s most used social platform by a wide margin, at 88%. YouTube also took the spot as the most favoured brand among Gen Z, followed by Google and Netflix.

Rather than turning to traditional media for information, 49% of Gen Z report obtaining their news and information from YouTube, compared to 37% of millennials. Similarly, 23% of Gen Z share news and information via TikTok, which is double any other generation. This is worth keeping in mind when selecting the channels in which to best communicate with Gen Z. Kerry Twibell, media industry marketer and advisor, has noted that because of this, companies have a unique opportunity to merge advertising and content strategies for this audience.

She suggests delivering engaging messaging through personalised videos embedded within newsletters or livestream events on TikTok to increase reach, loyalty, and revenue. According to The Drum, 77% of Gen Z believe it’s important for brands to customise interactions. Brands offering personalised and customisable experiences will appeal to the individualistic nature of Gen Z consumers, allowing them to express their creativity and individuality.

Bridging the Physical and the Digital

Gen Z shoppers are looking for technology to enhance their shopping experience, rather than replace it, which may come as a surprise. Although over half of Gen Z prefer to shop online, 47% prefer to shop in-store, which is higher than any other generation. Brands can harness tech to merge in-store experiences with online experiences in innovative ways, again making use of personalisation.

This is key for creating a unique discovery experience for the Gen Z shopper. Research has shown Gen Z to value discovery over loyalty. According to Adage, more than half of Gen Z surveyed claimed that they love to try different brands. Adage also notes that for Gen Z, discovery fuels brand engagement in many ways. ‘Discovery is play, discovery is visual, discovery is connection.’